A recent survey by Warehouse Specialists Inc, LLC (WSI) found that 75% of US manufacturers have warehouse networks that evolved organically, rather than being designed strategically. This has led to a quiet crisis in manufacturing warehouse networks, as companies struggle to keep up with changing operating environments.

Challenges Facing US Manufacturers

The survey, which included 306 supply chain, operations, and logistics leaders at US manufacturing companies, found that 73% of respondents said their current warehouse model was built for a different operating environment than the one they face today. This has resulted in a mismatch between the location of warehouses and the needs of customers, suppliers, labor pools, and cost pressures.

The survey also found that 83% of manufacturers have highly or somewhat centralized warehouse networks, with inventory clustered where products are made. However, only 35% have their primary facility within 10 miles of production, despite 59% saying proximity to the plant is very important.

Impact of Reshoring and Trade Volatility

The US manufacturing industry is being pushed by a wider set of forces, including reshoring and foreign direct investment (FDI), which are adding new manufacturing activity in the US. The Reshoring Initiative reported that 244,000 US manufacturing jobs were announced in 2024 through reshoring and FDI, with more than 2 million jobs announced since 2010.

Trade volatility is also adding pressure to warehouse strategy, with 78% of manufacturers naming trade uncertainty as their top concern. This has led to a need for more resilient and adaptable warehouse networks, with companies weighing cost against factors such as proximity, compliance, labor availability, and transportation exposure.

Original reporting: KRDO (Colorado Springs metro) — read the source article.